Low-Wage Job Study Ignores ObamaCare Hours Impact

Contrary to a new study showing that the jobs recovery has been disproportionately low-wage, better-paying work has come back somewhat faster when one adjusts for hours of work.

Because the study, by the National Employment Law Project, looks only at net hiring, it ignores the sharp divergence between the average workweek for low-wage earners (now at a record low) and non-low-wage workers (now a bit longer than before the recession).

Taking total work hours into account, low-wage employment rose 7.8% between the start of the jobs recovery and November 2013, according to the latest Bureau of Labor Statistics industry data available that aren't tainted by winter storms. That reflects the hours of nonsupervisors in private industries where pay averages up to about $14.50 an hour.

Meanwhile, total hours worked in the rest of the private sector (among supervisors and in higher paying industries) are up 10.1% over the same period.

When it comes to job growth over this same period, the tables are reversed: Low-wage jobs rose 8.6% and non-low-wage jobs 7.4%.

In fact, the job gains and hour gains in both categories were largely on the same path through the end of 2011. That's when net hiring tilted more to low-wage jobs, even as total low-wage work hours began to lag.

NELP included the retail industry among its fast job growers, but a closer look at the data shows a somewhat different picture. In March 2013, there were 340,000 more nonsupervisors on retail payrolls than in October 2011, but total hours worked among rank-and-file employees didn't budge over that time, Bureau of Labor Statistics data show. (This two-plus years of stagnating employment among retail workers is unprecedented this far removed from recession.)

On a net basis, the 644,000 non-management jobs added in low-wage industries in 2013 through November averaged just 17.9 hours per week.

It is true, as NELP says, that there are still fewer good-paying jobs than there were before the recession, and it's hard to argue that low-wage workers can't use a raise.

But the fact that hours have shrunk for low-wage workers suggests that too-few work hours, as well as low pay, should be part of the conversation on reducing inequality.

Contrary to a new study showing that the jobs recovery has been disproportionately low-wage, better-paying work has come back somewhat faster when one adjusts for hours of work.

Because the study, by the National Employment Law Project, looks only at net hiring, it ignores the sharp divergence between the average workweek for low-wage earners (now at a record low) and non-low-wage workers (now a bit longer than before the recession).

Taking total work hours into account, low-wage employment rose 7.8% between the start of the jobs recovery and November 2013, according to the latest Bureau of Labor Statistics industry data available that aren't tainted by winter storms. That reflects the hours of nonsupervisors in private industries where pay averages up to about $14.50 an hour.

Meanwhile, total hours worked in the rest of the private sector (among supervisors and in higher paying industries) are up 10.1% over the same period.

When it comes to job growth over this same period, the tables are reversed: Low-wage jobs rose 8.6% and non-low-wage jobs 7.4%.

In fact, the job gains and hour gains in both categories were largely on the same path through the end of 2011. That's when net hiring tilted more to low-wage jobs, even as total low-wage work hours began to lag.

NELP included the retail industry among its fast job growers, but a closer look at the data shows a somewhat different picture. In March 2013, there were 340,000 more nonsupervisors on retail payrolls than in October 2011, but total hours worked among rank-and-file employees didn't budge over that time, Bureau of Labor Statistics data show. (This two-plus years of stagnating employment among retail workers is unprecedented this far removed from recession.)

On a net basis, the 644,000 non-management jobs added in low-wage industries in 2013 through November averaged just 17.9 hours per week.

It is true, as NELP says, that there are still fewer good-paying jobs than there were before the recession, and it's hard to argue that low-wage workers can't use a raise.

But the fact that hours have shrunk for low-wage workers suggests that too-few work hours, as well as low pay, should be part of the conversation on reducing inequality.

This analytical failure, by extension, casts doubt on NELP's policy conclusion — that its study supports a hike in the minimum wage to $10.10 an hour — because it misses evidence that employers are responsive to ObamaCare's penalties.

The Congressional Budget Office's recent analysis of the Democratic proposal to raise the minimum wage to $10.10 an hour was widely reported to predict a loss of 500,000 jobs. Yet the nonpartisan scorekeeper said that combining a minimum-wage hike with ObamaCare's employer mandate would likely cause deeper job losses than a wage-hike alone.

ObamaCare's extra cost "boosts the likelihood that employers' savings from reducing the size of their workforces would exceed their adjustment costs" that could be made to get by with fewer workers, such as installing labor-saving equipment, the budget agency said.

CBO's analysis could be wrong. It's possible that the employer mandate won't magnify any job losses due to a higher minimum wage, but rather intensify pressure on low-wage employers to keep work schedules below 30 hours.

Either way, the combination of the employer mandate and a $10.10 minimum wage seems to be a problematic approach to lifting up low-wage earners.

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